Could Netflix Tumble Down The Crypto Market?
20 Aprile 2022 - 9:40AM
NEWSBTC
On Tuesday, the crypto market looked good in comparison to Netflix
(NFLX). The shares of the world’s leading streaming company
fell 27% to $256 in after-hours trading reaching 2019 levels
after announcing a massive loss of 200,000 subscribers in the first
quarter of 2022. This translated to roughly a $40 billion loss in
half an hour. This is the first time the company loses customers
since 2011 and is expecting to lose 2 million more in the current
second quarter. NFLX is already 63% down from its All-Time High and
over 40% this year. “For those wondering how long a miss
like this can sting: A reminder that $FB is still down ~33% since
it disclosed Facebook’s user growth hit a ceiling,” Bloomberg’s
Brian Chappatta noted. Analyst Michael Nathanson of
MoffettNathanson LLC told Bloomberg that “It’s just shocking,”
adding, “Everything they’ve tried to convince me of over the last
five years was given up in one quarter. It’s such an about-face.”
Will Crypto Follow? The news site further reported that “Disney
fell as much as 5.2% in extended trading after Netflix reported its
outlook, while Warner Bros. Discovery Inc., the owner of HBO Max,
declined as much as 2.8%. Shares of Roku Inc., the maker of set-top
boxes for streaming, dropped as much as 8.3%.” Many have wondered
if this could drag down the crypto market as well. An economist
noted that the last time a sharp shed like this happened for
Netflix (Jan 22, 2022), “it triggered [an over] 30% 4-day crash
across crypto.” However, he added that he doesn’t think this will
be an issue this time. “It’s now an idiosyncratic event.” The
reason why many do not think this scenario will repeat is that the
previous case was highly related to the macroeconomics –the general
stock market sell-off over fear related to interest rate hikes in
the U.S.–, while this time the indicator seems to be specific to
the company’s declining demand. Related Reading | Bitcoin
Nosedives Below $38k As Tech Stocks Take A Beating, Pandemic Gains
Disappears Back in January, the company admitted that the
competition is “affecting marginal growth some.” Now, besides the
increasing competition, they stated that the bad performance in Q1
was partly due to a large amount of customers who share their
passwords, estimating 100 million households that use the service
technically for free. They also pointed out macro factors, ”
including sluggish economic growth, increasing inflation,
geopolitical events such as Russia’s invasion of Ukraine, and some
continued disruption from COVID are likely having an impact as
well.” Netflix completely missed their forecast for a 2.5 million
growth in subscribes as well as Wall Street’s estimate, which also
expected them to add that many users in the first quarter of 2022.
In contrast, the anti-crypto propaganda that calls it “too
volatile” and “too risky”, claiming that investors need protection
from it, is looking weak and pale today. Around January 27, after
the first big Netflix plunge of the year, Bill Ackman had reported
that his hedge fund purchased more than 3.1 million shares of the
company. That makes his position currently 387.5M down. Related
Reading | Majority Of Crypto Holders Will Hold Through An 80%
Crash, New Survey Shows “Somebody Always Knows” The second big
thing that contrasts with crypto is that the industry is often
called a fraud scheme, but to some analysts, this NFLX scenario is
giving signs of insider trading. The Twitter account Unusual Whales
noticed that “the most active hot chain before close” was $NFLX
with $300 put. “And the top floor trades were all bearish.” This
means that traders with put options probably made a lot of money.
Which sounds like they knew something would happen. Similarly, the
account also noted that “A trader took a huge $NFLX put position,
buying +100k at ~$2 ask 7 days ago. The position had 4500 volume
that day, 41 volume the day before, expiring in a month. Likely
made 1000%.”
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